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NAFTA & Trade Deficits
Per BBC.com article: "NAFTA has quadrupled trade among the three countries, surpassing $1 trillion in 2015. Over a decade to 2010, however, the US lost nearly six million manufacturing jobs."
"By last year, the US ran a $64bn trade deficit with Mexico and a nearly $11bn gap with Canada."
My first questions is what is a trade deficit? We import more from Canada and Mexico than they import from us, right? This leads to a gap of how much we owe them "implied by deficit" or implies that this is simply how large the cost disparity is between goods and services passing between the NAFTA partners. The president is tooting the horn for Congress to rally and August 16th, or there abouts, renegotiations of NAFTA will begin. Congress has to ratify any agreement made. Ah, there's the rub. Congress is Republican dominated and no party that ever exisited in history is more pro U.S. business. The weighing in by Representatives and Senators will be interestingly interpreted by left wing radical television, radio, and social media satire mongers.
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Loss of six million manufacturing jobs tied to NAFTA - seems high. Closures of businesses that make anything are subject to all kinds of regulations, inability to compete in low cost of living countries, and Congress stalled in promoting U.S. businesses hollistically instead of piecemeal. The one at a time approach is a failure. The one industry at a time distances rebuilding U.S. manufacturing across the board from any help from Washington. NAFTA, clearly designed to expand opportunities for sales, has dismally failed us. Mex-Can are not manipulating their currency - their GNP is simply lower than ours. Importing cheap goods from China is not helping U.S. manufactories either.
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A while back, Canada was suggested as being exempt from NAFTA renegotiations. Something has changed or more attention will be given to Mexico than Canada as they all sit down to negotiate a fair free trade pact. Remember, Canada is a part of the British Commonwealth and the queen is titular head of their government. To help Canada helps Britain - okay, but why single out Mexico.
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A few historical beliefs: the illegal drug trade uses Mexico as a direct route to the U.S. A few observations: Mexico refuses to pay for the wall Trump wants built by U.S. workers using U.S. goods and services ostinsibly to highlight U.S. trade deficit, curtail drug trafficing, and discourage illegal immigration. A trillion dollar (peso) wall would boost construction jobs in the U.S. (So the impossible dream goes). Trade deficits with Mexico were higher because their economy was smaller at the outside of NAFTA. It has since grown, but rather than partner with U.S. companies, it is electing to selectively trade with other countries. The intent of NAFTA to respond to the European Union and form an exclusive trading bloc has simply failed and we lost. Gotta give it to the numbers. We are supporting other countries economically without benefit to ourselves. (True, but that has always been true because we are bigger and badder than everyone else). Like lend-lease and loans to European countries after WWII - if I am right, France never repaid it's war debts to the U.S. We kinda forgave the debts. Is it me or is a trillion dollars not sufficient to rebuild 600 U.S. manufacturing companies and restore U.S. jobs? (over the next ten years). This is robbing Peter to pay Paul economics. We will spend trillions on the Pentagon over the next ten years and for good cause, we have a lot of enemies, but how big really is a trillion dollars compared to the U.S. annual budget and our GNP? Not for a year, for a decade.
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A look at trade deficits between the U.S. and the world of other nations might be helpful for comparisons. To be looked at, but for now, within a month we begin renegotiating. If it is anything like the repeal of the Health Care Act, we can look forward to more gaffs and impossible suggestions. We just dropped out of the Paris Accord on Global Warming, maybe we will strip down NAFTA and enter a protectionist posture to make America Great Again. Personally, I thought, at least economically, we were pretty great already, but you no me. I think U.S. protectionism will help U.S. workers by assisting all of our businesses (without large tax breaks) and not just protecting and ignoring the privileged companies who do huge business overseas or those who depend on their income by using cheap labor outside the U.S. Over twenty years, rather than ending health care for 22 million U.S. citizens, maybe the corporate few are due for a rap on the corporate model wrist.
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The health care bill proposed by Republicans has failed (insert sigh of relief). Let us break our word again as with Global Warming efforts to reduce carbon signatures and combat what is surely coming as the rise of sea levels and get out of NAFTA in the most dignified political way possible. With Mexico. If they won't build the wall, destroy their trade imbalance surpluses and pull down their prosperity. After all, they refused to keep their citizens at home and let drug cartels flourish to addict U.S. citizens, hurting us bodily, and economically by pushing up our healthcare costs.
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The negotiations will begin and we will be watching to see that our trade negotiator does not give away the farm again. Easing out of an agreement is what nations do when it's not working out, right? Oh Canada. You too will buy more from us or suffer Mexico's imagined fate: tariffs.
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I'm just sayin.
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Stella L. Crews
07-18-17
854a
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